The Muhammadu Buhari-led federal government on Monday proposed a budget of N6 trillion for 2016 at an oil bench mark of 38 dollar per barrel.
The planned spending is the first for the administration of Mr. Buhari, who took office in May 2015.
The minister of Budget and National Planning, Udoma Udoma, stated this while addressing State House Press Corps after an emergency Federal Executive Council meeting presided over by President Muhammadu Buhari.
The minister said the proposal was contained in the Medium Term Expenditure Framework, MTEF, approved by the council.
“At today’s council, the council approved the Medium Term Expenditure Framework.
“This sets out the policies of government over the next three years. It sets out the fundamental economic underpinning of the budget.
“The highlights are as follows. We project and we are working with 38 dollar crude oil price.
“We consider that to be very conservative but because of the uncertainties, we feel that we should start with a conservative crude oil price.
“We also are working with 2.2 million barrels per day production.
“We believe it is achievable, particularly because with the passage of the Petroleum Industry Bill, which we are working to achieve, we believe that that is actually a modest figure; that we should be able to produce something higher than that.
“And so, next year we are looking at an expansionist budget. We are looking at a budget that will be N1 trillion more than last year.
“So we are looking at a budget of about N6 trillion. Last year’s budget, including the supplementary, was about N5 trillion.
“Most of the increases, all the increases actually will be spent on capital because there is the need to increase the capital spending because of our infrastructure issues we have to address,” he said.
According to him, the plan would be submitted to the National Assembly and a feedback expected after which the budget will be finalised with all the details embedded.
The minister said the funding for the budget would come from earnings from the non-oil sector.
“We are looking at trying to get more money from the various government agencies, policing their collection and trying to get more money from them.
“We will also look at keeping down our recurrent budget, which means we are looking at savings that we can make from overheads.
“We will also look at the deficiency from our revenue collecting agencies like the FIRS, in terms of companies income tax; in terms of VAT, and then the difference we will have to borrow.
“But the level of borrowing that we anticipate and we are projecting will be well within the maximum that we allow, which is three per cent of the GDP, because we want a prudent budget; we want a credible budget,” he said.
Mr. Udoma futher said the council was working on the exchange rate that the Central Bank of Nigeria had given for the budget, adding that it was also looking into whether fuel subsidy would be retained in 2016.
According to him, government is projecting almost 30 per cent of the budget on capital projects, up from the 15 per cent or so that it is currently.
“We will try and reduce overheads, but keep personnel cost; we are not going to adjust it by much.
“But we are expecting some savings from the Integrated Payroll and Personnel Information System, IPPIS, which we are using; so we are not cutting anybody’s salary; everybody will get their salaries,” the minister said.
The minister, however, declined to mention how much of the looted funds had been recovered by the government so far.